Improvements to Cover Wording

Protocol Cover v1

Converted to a style which is easier for me to structure / edit although less readable to the end user, no substantive changes:

Suggested improvements in changed format, comments inline:

  • [ ] create a global definition of a loss event and refer to this consistently
  • [ ] replace “will not pay” with “should not pay” to avoid the impression that the discretion of the Membership is fettered by the Cover Wording
  • [ ] improve definition of Designated Protocol - calling it “open source” might be problematic in the case of e.g. Uniswap V3 which would not normally be considered an open licence
  • [ ] specify what happens when a Member ceases to be a Member during the Cover Period
  • [ ] improve exclusions of non-protocol related loss events (e.g. phishing), “any activity where the …protocol continues to act as intended” could be too broad - an AMM continues to act as intended after being drained in an oracle manipulation attack

I understand that frequent changes to the cover wording should be avoided, and also there may be a considerable review process involving senior members of the team, so guidance appreciated on whether I should continue along this line. This is a prelude to work with @BraveNewDefi on modifying cover wording to prevent double recovery of losses by members see Work with covered protocols to enforce the principle of indemnity - #2 by Hugh

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Clause 5.2
Why would a partial payment to match a loss smaller than the insured amount not be possible? Why would the full cover amount be paid when the loss suffered by the cover holder was smaller? This seems to violate the principle of indemnity - can we make a global restriction on recovering amounts greater than the loss suffered by the cover holder?

This is a technical restriction at the smart contract level right now, only a full payment or no payment can be made. Core team are currently building capability for partial payments so the wording was drafted to be forwards compatible with this upcoming change. We always wanted to have this capability but we started with a simplified version to start with.

Will come back with detailed comments on this! Appreciate you taking the initiative :turtle:

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